Shortly before the outbreak of the Gryps Conflict in UC 0087, the Earth Federation Forces' Titans branch is hard at work developing its own mobile weapons in secret as part of its goal of subjugating the Earth Sphere. One of their earliest and more revolutionary designs is the RX-178 Gundam Mark II, based loosely on the well-known RX-78-2 Gundam from the One Year War. Although designed as a general purpose mobile suit, the Mark II is intended to be a highly capable unit under gravity and atmosphere - specifically, when fighting inside space colonies. Three prototype units are constructed at the Titans' base at the Gryps colonies, with plans to mass-produce the Mark II already in the works.

The main technical advancement introduced with the Mark II is the "movable frame" construction concept. Up until that point, almost all mobile suits are built on the "monocoque" construction concept - with the external armor serving as a "shell" that supported all of the thrusters, joints, hydraulics, fuel tanks, et cetera, that are stored inside. The movable frame concept turns this design philosophy around; the Mark II is built around a skeleton-like frame, with all thrusters, fuel tanks, weapons and so forth mounted on the frame, and minimal amounts of armor applied to those critical areas that need protection. With the advent of portable beam weaponry, a mobile suit is typically destroyed with one or two well-placed shots regardless of its armor; therefore, it is decided that otherwise useless armor would be sacrificed for lighter weight - and thus greater speed and maneuverability. When word of the Mark II's development reaches the underground Anti-Earth Union Group movement, its leaders decide to move openly to capture one of the prototype mobile suits. Not only will this serve to give the AEUG access to the movable frame technology, but it will allow them to openly prove to the entire Earth Sphere that the Titans - now developing new war technologies - have other plans for the otherwise independent-minded space colonists.

On March 2, UC 0087, AEUG Captain Quattro Bajeena (the incognito Zeon ace pilot Char Aznable of the One Year War) leads a team of Rick Dias mobile suits into the Gryps II space colony to gather reconnaissance data and - if possible - capture one of the "black Gundams." Luck will be with Captain Quattro, as a young boy named Kamille Bidan finds himself in dire straights with the Titans... and being a mobile suit construction hobbyist, soon at the controls of one of the Gundams. With a newfound ally in the boy, Quattro manages to capture all three Mark II prototypes. However, the Titans are not so willing to give up their prototypes, and the first days of the Gryps Conflict focus on who will own the three mobile suits. In the end, the AEUG comes out the winner of the prizes: Unit 02 is heavily damaged in combat; Units 01 and 02 are disassembled and shipped off to the AEUG-supporting Anaheim Electronics' lunar factory for study; and Unit 03 is repainted in a more traditional midnight-blue-on-white color scheme and remain in the hands of new AEUG recruit Kamille Bidan.

However, the AEUG soon finds its newly-acquired Mark II to be outclassed by newer and more powerful variable-form mobile suits/mobile armor being developed and fielded by the Titans. One serious design flaw in the Mark II is its older-style titanium alloy/ceramic composite armor; this factor, combined with its rather unremarkable armament of 2 beam sabers, an optional head-mounted vulcan gun pod, and beam rifle, make the Mark II little more than a remake of the original RX-78-2 Gundam. As Anaheim continues its "Project Zeta" of next-generation mobile suit development for the AEUG, new items are needed to help boost the Mark II's performance. The first of these is the Flying Armor, a sub-flight system based on the new "waverider" technology being developed for the MSZ-006 Zeta Gundam. The Flying Armor unit - built exclusively for the Mark II - allows the Mark II to safely enter the Earth's atmosphere, and then act as a sub-flight unit, giving the Mark II unprecedented mobility in atmospheric combat. Later on, as Kamille moves on to pilot the new Zeta Gundam and the Mark II is passed off to former Titans member-turned-AEUG pilot Emma Sheen, a second support system for the Mark II is developed: the FXA-05D Defenser, a space fighter-like vehicle that can combine with the Mark II into the Super Gundam, putting the Mark II on a more equal footing with the Titans' high-performance variable mobile suits/mobile armor. At the end of the Gryps Conflict in early UC 0088, the Mark II is heavily damaged. After being repaired on the Anaheim Electronics ship La Vie En Rose, the Mark II is put back into service until it is critically damaged almost a year later in Axis during the final battle of the First Neo Zeon War.